NEWS FLASH

December 2013

Message from the CEO

As 2013 draws to a close, and we come upon our 10th anniversary, it seems an opportune time to stop and consider the many challenges overcome by the ICTI CARE Process and what it has achieved. We can report that substantial progress was made in improving safety and health conditions, achieving better compensation and decreasing workers’ hours.  Our program has also become financially self-sustaining.  We now have ICP-trained and accredited auditors that meet our professional requirements in China, Hong Kong, India, Indonesia, Taiwan, Thailand and Vietnam serving over 1,500 registered factories in the program. Since we established a more flexible working-hours policy, factory transparency has increased significantly.   When it comes to education and training, our re-launched two-day ICP Management System Training Program has experienced great demand by the factories and has expanded to new geographic locations such as Shenzhen, Dongguan and Jiangsu. ICP’s Helpline service is also increasingly used by workers and has proven to be a valuable mechanism for addressing factory workers’ personal and professional concerns.  New funding mechanisms were also put in place to finance both of these activities --- contributions obtained through the national toy associations as well as direct funding from brands and retailers, the main beneficiaries of the program.   After much planning and development, we proudly launched our redesigned bilingual website end-October which has had over 6,900 visits.   I want to extend my sincere thanks to the ICF Secretariat and ICFAL staff members who have met all of our challenges head on.  I would also like to express my gratitude for the industry’s continued support of ICP’s efforts to improve factory working conditions, especially during these economically challenging times. I wish everyone continued success in 2014 and look forward to working with you in the New Year! Christian Ewert President and CEO

Auditing and Monitoring

Self- Declaration Procedure Makes Steady Progress Since August 2013, ICTI CARE Foundation Asia Ltd. (ICFAL) has encouraged factories to make use of the new Self-Declaration Procedure as a way to increase transparency and help advance social compliance in the children’s products industry. Based on self-monitoring, factories can voluntarily declare instances of non-compliance to ICFAL prior to their field audit.  ICFAL will then decide whether to exempt the issue from the audit depending on the degree of seriousness and the corrective actions being taken to address it.   As of December 2013, ICFAL has received 58 valid applications.  The top three reported issues are:   1) Failure to provide one day’s rest over 7 days (56.9%, 33 cases)   2) Less than 10 hours rest over 24 hours (31%, 18 cases)   3) Delayed wage payment (10.3%, 6 cases)  Factories are reacting positively to this approach and express strong interest in learning more about it during training courses hosted by ICFAL. To view how it works, as well as FAQs, please visits here.  Prior to establishing the new Self-Declaration Procedure, a factory would be required to fully comply with the ICP standard during an entire year of operation.  Understanding that occasional instances of non-compliance can happen, this new procedure allows a factory to demonstrate transparency and integrity by reporting the information and taking corrective action earlier rather than waiting for the regularly scheduled audit.   Updated Audit Protocol Sets Now Available for Overseas Purchase  With the support of the Hong Kong Toy Council, the updated ICTI CARE Process Audit Protocol Handbook currently available in Hong Kong and China (Review the article), is now being made available for purchase by interested parties overseas.

To place your order, please complete and return the order form to the secretariat of the Hong Kong Toy Council.   Each set costs US$50 and includes: ICTI CARE Process Audit Protocol Handbook ICTI CARE Process Program Guideline Local Specific Guideline International Council of Toy Industries Code of Business Practices poster. For all enquiries please contact Ms. June Fung (The Secretariat, Hong Kong Toys Council) via june.fung@fhki.org.hk or +852 2732 3104.  ICFAL Office Schedule and Blackout Period during Chinese New Year The ICFAL office will be closed for the upcoming Chinese New Year from Friday, January 31 and will reopen on Tuesday, February 4.  No audits will be conducted in Mainland China, Hong Kong and Taiwan between January 24 and February 15, 2014.

Education and Training

Pilot IFIS Training Program successfully completed in Shanghai The 14 factories participating in the ICP Factory Improvement and Support (IFIS) Program launched November 2012 have completed all of the program phases and received surveillance audits as of October 2013.  These factories greatly increased their understanding of ICP requirements and policies. Those which have shown transparency, as well as improvement, were either reinstated into the program or received an extension of their probation period; however, some were also terminated due to non-transparency or for committing critical violations.  A detailed study has been done to analyze the level of effectiveness of the IFIS program, service quality of the consultancy, and the disposition (based on the last audit results) of these participating factories and their future direction. The following commitments are essential for factories interested in IFIS program:   - To strive for factory’s improvement  - To show transparency to the ethical consultant and ICFAL  - To execute the Corrective Action Plan (CAP) supported by reliable KPI data Further information or participant of the program will be announced in the coming future. Please check our official website for updated.  54 New Auditors Accredited to ICP Program to Meet Demand   In response to demand for more ICP accredited auditors, ICFAL conducted six additional IRCA certified training sessions during 2013.  They accredited 54 new auditors.

List of the New Auditor Training in 2013 Date   Location  Number of New Accredited Auditors 14 – 16 Jan  Shenzhen  11  28 – 30 Jan   Shenzhen   8  13 – 15 Mar  Shenzhen 8 8 – 10 May  Shenzhen   8  24 – 26 Sept  Shenzhen  9 19 – 21 Nov  Shanghai   10

There are now a total of 184 ICP accredited auditors in China, up from 154 at the beginning of 2013.  ICP auditors are currently certified in China, Hong Kong SAR, India, Indonesia, Taiwan, Thailand and Vietnam.   The complete lists of the ICP accredited firms and their auditors can be found on our website. (Click here to see the lists)  ICFAL Hosts Five ICP Management Systems Training Courses in China ICFAL, in collaboration with the Dongguan Toys & Juvenile Products Associations, Jiangsu Toy Chamber of Commerce and the Shenzhen Toy Association, has hosted five ICP Management Systems Training sessions during the 4th quarter, servicing over 270 representatives from 199 factories.

Date Location No. of factories No. of Representatives  28-29 Oct Shenzhen 34  43   13-14 Nov  Dongguan 50  58   20-21 Nov  Nanjing  28  44  28-29 Nov  Shenzhen  51 69  23-31 Dec  Dongguan  36  56   Total 199  270

This two-day training course gives factory managers, supervisors and staff a basic understanding of ICTI CARE Process (ICP) policies and procedures, including practical examples.     Training topics include:  - Introduction to the ICP Program and its objectives  - Comprehensive overview of key ICP policies and audit procedure requirements pertaining to: Working hours and wages Labor practices Health, safety and environment   - Q & A session  Regular ICP Management Systems Training sessions will be held throughout 2014 in response to growing factory demand.

Events

ICFAL Launches ICP’s 5th Annual Factory Survey  On November 18th, ICFAL launched the ICTI CARE Process (ICP) Program’s Fifth Annual Survey.   This anonymous bilingual survey was sent by email to all factories currently registered in the ICP Program (see list here).  This year’s survey focuses on learning more about the challenges children’s products manufacturer’s face, especially the impact of acceptance of ICP Seal of Compliance by brands and buyers.   The survey consists of 76 questions and takes about 40 minutes to fill out. Factories are strongly encouraged to respond to the survey so we can better assess and address their concerns.   A summary of the survey results will be published Q1 2014.  Previous survey reports can be found here.

During the last 10 years we worked hard to contribute to the ongoing improvement of toy industry factories. We helped the industry work together to address common challenges. We believe soliciting factories’ feedback and comments is one of the steps to make sure we are going in the right direction and giving factories the support they need. Program Evaluation Shows Strong Factory Interest in Capacity Building Programs   Following our second annual seminar hosted in Shanghai on October 16th, ICFAL sent an online program evaluation survey to the 80 factory representatives who participated requesting their feedback on the content of the seminar and the ICP capacity building programs.

ICP Annual Seminar in Shanghai

About 40 percent of factory representatives responded, most from the Guangdong and Jiangsu areas. Among the four training programs that were introduced during the seminar, the ICP Management Systems Training received the most interest.    The top three most popular topics were:      - Updated ICP policies      - How to comply with ICP requirements      - Capacity Building Program  The survey findings showed that in addition to policy updates, factory representatives want ICFAL to host programs that address internal communications, environmental health and safety, human resource management and labor laws.  To see our training course schedule and ICP Capacity Building Program flyer, visit our website

ICFAL CEO to Present Seminar on January 7th During Hong Kong Toys & Games Fair On Tuesday, January 7th, from 10:00 to 11:00am, ICTI CARE Foundation Asia Limited President and CEO, Christian Ewert, will speak at the Hong Kong Convention and Exhibition Center in meeting Rooms N104-105 in conjunction with the 40th Hong Kong Toys & Games Fair. His topic is “10th Anniversary of the ICTI CARE Process:  Retrospective and Outlook.”   For general information about the fair and events that will take place in Hong Kong January 6-9, 2014, please click here.

Upcoming Events

Jan 2014 7 Seminar on “10th Anniversary of the ICTI CARE Process (ICP): Retrospective and Outlook (Program Details: Click here)

Toy Brand and Factory Data

Factories Registered in the ICTI CARE Process: (representing approximately 1.4 million workers) 1423 Factories with an ICP Seal of Compliance:  1095 Companies committed to Date Certain:  902 Countries represented (19 national toy associations, plus 9 other countries):        31 Total